HomeMy WebLinkAboutO-1998-2253
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ORIGINAL
ORDINANCE NO. 98-2253
ORDINANCE AUTHORIZING THE ISSUANCE OF CITY OF LA PORTE, TEXAS,
WATERWORKS AND SEWER SYSTEM REVENUE BONDS, SERIES 1998, AND ALL
OTHER MATTERS RELATED THERETO
WHEREAS, the City of La Porte, Texas (the "City" or the "Issuer") has heretofore issued the
following described outstanding bonds (collectively, the "Previously Issued Parity Bonds") to-wit:
CITY OF LA PORTE, TEXAS, WATERWORKS AND SEWER SYSTEM REVENUE
BONDS, SERIES 1990 in the principal amount of $500,000 (the "Series 1990 Bonds");
CITY OF LA PORTE, TEXAS WATERWORKS AND SEWER SYSTEM REVENUE
REFUNDING BONDS, SERIES 1991 in the principal amount of $1,020,000 (the "Series
1991 Bonds"); and
CITY OF LA PORTE, TEXAS, WATERWORKS AND SEWER SYSTEM REVENUE
REFUNDING BONDS, SERIES 1994 in the principal amount of $2,125,000 (the "Series
1994 Bonds");
WHEREAS, all of the Previously Issued Parity Bonds are secured by a pledge of the net revenues
from the operation of the City's combined waterworks system and sanitary sewer system (the "System") and
are on a parity with each other (and any Parity Bonds, hereinafter defined, which are hereafter authorized,
issued, and delivered);
WHEREAS, notice of intention to issue the bonds authorized hereby has been given by publication
thereof in The Bayshore Sun, a newspaper of general circulation in the City, on May 24, 1998 and May 27,
1998;
WHEREAS, the City has received no petition from the qualified electors of the City protesting the
issuance of the Bonds; and
WHEREAS, the Bonds are to be issued and delivered pursuant to the Charter of the City and Articles
1111 through 1118, inclusive, Vernon's Texas Civil Statutes, as amended, for the purposes set forth above;
THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF LA PORTE,
TEXAS, THAT;
Section 1. BONDS AUTHORIZED. The City's bonds designated as the "City of La Porte, Texas,
Waterworks and Sewer System Revenue Bonds, Series 1998" (the "Bonds") are hereby authorized to be
issued in the aggregate principal amount of $1,250,000 for the purpose of providing funds for constructing
improvements to the System and pay costs of issuance.
Section 2. DATES. MATURITIES. AND INTEREST RATES. The Bonds shall be dated June 15,
1998, shall be in the denomination of $5,000 or any integral multiple thereof, shall be numbered
consecutively from R-I upward (provided that the Initial Bond shall be number I-I), shall mature on the
maturity date, in each of the years, and in the amounts, respectively, as set forth in the following schedule,
and shall bear interest payable March 15, 1999, and semiannually thereafter on September 15 and March 15
of each year to the registered owner of any such Bond in the manner provided in the FORM OF BOND set
forth in this Ordinance:
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YEARS
2000
2001
2002
2003
2004
AMOUNTS
$125,000
125,000
125,000
125,000
125,000
MATURITY DATE: MARCH 15
INTEREST
RATES
6.20%
6.20
5.10
4.20
4.25
YEARS
2005
2006
2007
2008
2009
AMOUNTS
$125,000
125,000
125,000
125,000
125,000
INTEREST
RATES
4.25%
4.25
4.30
4.35
4.35
Section 3. RIGHT OF PRIOR REDEMPTION. The City reserves the right to redeem the Bonds
maturing on or after March 15, 2005, in whole or in part in principal amounts of $5,000 or any integral
multiple thereof, on March 15, 2004, or on any date selected by the City thereafter, at the redemption prices,
on the dates, and in the manner described in the FORM OF BOND set forth in this Ordinance
Section 4. CHARACTERISTICS OF THE BONDS. (a) Registration. Transfer. and Exchange:
Authentication. The Issuer shall keep or cause to be kept at the principal corporate trust office of Chase Bank
of Texas, National Association, Houston, Texas (the "Paying Agent/Registrar") books or records for the
registration of the transfer and exchange of the Bonds (the "Registration Books"), and the Issuer hereby ap-
points the Paying Agent/Registrar as its registrar and transfer agent to keep such books or records and make
such registrations of transfers and exchanges under such reasonable regulations as the Issuer and Paying
AgentlRegistrar may prescribe; and the Paying Agent/Registrar shall make such registrations, transfers, and
exchanges as herein provided. The Mayor and the City Secretary are authorized to enter into a Paying
AgentlRegistrar Agreement substantially in the form of Exhibit A, attached hereto. The Paying
AgentlRegistrar shall obtain and record in the Registration Books the address of the registered owner of each
Bond to which payments with respect to the Bonds shall be mailed, as herein provided; but it shall be the
duty of each registered owner to notify the Paying Agent/Registrar in writing of the address to which
payments shall be mailed, and such interest payments shall not be mailed unless such notice has been given.
To the extent possible and under reasonable circumstances, all transfers of Bonds shall be made within three
business days after request and presentation thereof. The Issuer shall have the right to inspect the
Registration Books during regular business hours of the Paying Agent/Registrar, but otherwise the Paying
AgentlRegistrar shall keep the Registration Books confidential and, unless otherwise required by law, shall
not permit their inspection by any other entity. The Paying Agent/Registrar's standard or customary fees and
charges for making such registration, transfer, exchange and delivery of a substitute Bond or Bonds shalI be
paid as provided in the FORM OF BOND set forth in this Ordinance. Registration of assignments, transfers,
and exchanges of Bonds shalI be made in the manner provided and with the effect stated in the FORM OF
BOND set forth in this Ordinance. Each substitute Bond shall bear a letter and/or number to distinguish it
from each other Bond.
Except as provided in (c) below, an authorized representative of the Paying Agent/Registrar shall,
before the delivery of any such Bond, date and manualIy sign the Paying AgentlRegistrar's Authentication
Certificate, and no such Bond shall be deemed to be issued or outstanding unless such Certificate is so ex-
ecuted. The Paying Agent/Registrar promptly shall cancel all paid Bonds and Bonds surrendered for transfer
and exchange. No additional ordinances, orders, or resolutions need be passed or adopted by the governing
body of the Issuer or any other body or person so as to accomplish the foregoing transfer and exchange of
any Bond or portion thereof, and the Paying Agent/ Registrar shall provide for the printing, execution, and
delivery of the substitute Bonds in the manner prescribed herein, and said Bonds shall be of type composition
printed on paper with lithographed or steel engraved borders of customary weight and strength. Pursuant to
Article 717k-6, Vernon's Texas Civil Statutes, as amended, and particularly Section 6 thereof, the duty of
transfer and exchange of Bonds as aforesaid is hereby imposed upon the Paying AgentlRegistrar, and, upon
the execution of said certificate, the transferred and exchanged Bond shall be valid, incontestable, and
enforceable in the same manner and with the same effect as the Bonds which initially were issued and
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delivered pursuant to this Ordinance, approved by the Attorney General, and registered by the Comptroller of
Public Accounts.
(b) Pavrnent of Bonds and Interest. The Issuer hereby further appoints the Paying AgentlRegistrar to
act as the paying agent for paying the principal of and interest on the Bonds, all as provided in this
Ordinance. The Paying Agent/ Registrar shall keep proper records of all payments made by the Issuer and
the Paying Agent/Registrar with respect to the Bonds.
(c) In General. The Bonds (i) shall be issued in fully registered form, without interest coupons, with
the principal of and interest on such Bonds to be payable only to the registered owners thereof, (ii) may be
redeemed prior to their scheduled maturities, (iii) may be transferred and assigned, (iv) may be exchanged for
other Bonds, (v) shall have the characteristics, (vi) shall be signed, sealed, executed, and authenticated, (vii)
shall have the principal of and interest on the Bonds be payable, and (viii) shall be administered and the
Paying Agent/Registrar and the Issuer shall have certain duties and responsibilities with respect to the Bonds,
all as provided, and in the manner and to the effect as required or indicated, in the FORM OF BOND set
forth in this Ordinance. The Bond initially issued and delivered pursuant to this Ordinance (the "Initial
Bond") shall be delivered to the initial purchaser and are not required to be, and shall not be, authenticated by
the Paying Agent/Registrar, but on each substitute Bond issued in exchange for the Initial Bond or any Bond
or Bonds issued under this Ordinance the Paying AgentlRegistrar shall execute the PAYING AGENTIREGlS-
TRAR'S AUTHENTICATION CERTIFICATE, in the form set forth in the FORM OF BOND.
(d) Substitute Pavinf! Af!ent/Ref!istrar. The Issuer covenants with the registered owners of the Bonds
that at all times while the Bonds are outstanding the Issuer will provide a competent and legally qualified
bank, trust company, financial institution, or other agency to act as and perform the services of Paying
AgentlRegistrar for the Bonds under this Ordinance, and that the Paying AgentlRegistrar will be one entity.
The Issuer reserves the right to, and may, at its option, change the Paying Agent/Registrar upon not less than
120 days written notice to the Paying Agent/Registrar, to be effective not later than 60 days prior to the next
principal or interest payment date after such notice. In the event that the entity at any time acting as Paying
Agent/Registrar (or its successor by merger, acquisition, or other method) should resign or otherwise cease to
act as such, the Issuer covenants that promptly it will appoint a competent and legally qualified bank, trust
company, financial institution, or other agency to act as Paying Agent/Registrar under this Ordinance. Upon
any change in the Paying Agent/Registrar, the previous Paying Agent/Registrar promptly shall transfer and
deliver the Registration Books (or a copy thereof), along with all other pertinent books and records relating to
the Bonds, to the new Paying Agent/Registrar designated and appointed by the Issuer. Upon any change in
the Paying AgentlRegistrar, the Issuer promptly will cause a written notice thereof to be sent by the new
Paying AgentlRegistrar to each registered owner of the Bonds, by United States mail, first-class postage
prepaid, which notice also shall give the address of the new Paying Agent! Registrar. By accepting the
position and performing as such, each Paying Agent/Registrar shall be deemed to have agreed to the provi-
sions of this Ordinance, and a certified copy of this Ordinance shall be delivered to each Paying
AgentlRegistrar.
Section 5. FORMS. The form of all Bonds, including the form of Paying Agent/Registrar's
Certificate, the Form of Assignment, the form of Statement of Insurance, if any, and the form of the
Comptroller's Registration Certificate to accompany the Bonds on the initial delivery thereof, shall be,
respectively, substantially as follows, with such appropriate variations, omissions, or insertions as are
permitted or required by this Ordinance:
FORM OF DEFINITIVE BONDS
NO. R-_
$
United States of America
State of Texas
CITY OF LA PORTE, TEXAS,
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OR~GINAL
WATERWORKS AND SEWER SYSTEM REVENUE BOND,
SERIES 1998
INTEREST RATE
%
MATURITY DATE
ISSUE DATE
June 15, 1998
CUSIP NO.
REGISTERED OWNER:
PRINCIPAL AMOUNT:
DOLLARS
ON THE MATURITY DATE, specified above, THE CITY OF LA PORTE, TEXAS, a home rule
city and municipal corporation of the State of Texas (the "City"), hereby promises to pay to the Registered
Owner, specified above, or the registered assignee hereof (hereinafter called the "registered owner") the
Principal Amount, specified above, and to pay interest thereon calculated on the basis of a 360 day year of
twelve 30 day months, from the Issue Date, specified above, to the date of its scheduled maturity or the date
of its redemption prior to scheduled maturity, at the Interest Rate per annum, specified above, with said
interest being payable on March 15, 1999, and semiannually on each September 15 and March 15 thereafter.
THE TERMS AND PROVISIONS of this Bond are continued on the reverse side hereof and shall for
all purposes have the same effect as though fully set forth at this place.
THE PRINCIPAL OF AND INTEREST ON this Bond are payable in lawful money of the United
States of America, without exchange or collection charges. The principal of this Bond shall be paid to the
registered owner hereof upon presentation and surrender of this Bond at maturity or upon the date fixed for
its redemption prior to maturity, at the designated payment office of CHASE BANK OF TEXAS,
NA TIONAL ASSOCIATION, Houston, Texas, which is the "Paying Agent/Registrar" for this Bond. The
payment of interest on this Bond shall be made by the Paying AgentlRegistrar to the registered owner hereof
as shown by the Registration Books kept by the Paying Agent/Registrar at the close of business on the
Record Date (hereinafter described) by check drawn by the Paying Agent/ Registrar on, and payable solely
from, funds of the City required to be on deposit with the Paying AgentlRegistrar for such purpose as herein-
after provided; and such check shall be sent by the Paying AgentlRegistrar by United States mail, postage
prepaid, on each such interest payment date, to the registered owner hereof at its address as it appears on the
Registration Books kept by the Paying Agent/Registrar, as hereinafter described. The record date ("Record
Date") for the interest payable on any interest payment date means the last calendar day of the month next
preceding such interest payment date. In the event of a non-payment of interest on a scheduled payment date,
and for 30 calendar days thereafter, a new record date for such interest payment (a "Special Record Date")
will be established by the Paying Agent/Registrar, if and when funds for the payment of such interest have
been received from the City. Notice of the Special Record Date and of the scheduled payment date of the
past due interest (which shall be 15 days after the Special Record Date) shall be sent at least five business
days prior to the Special Record Date by United States mail, first class, postage prepaid, to the address of
each registered owner of a Bond appearing on the books of the Paying Agent/Registrar at the close of
business on the last business day next preceding the date of mailing of such notice. The City covenants with
the registered owner of this Bond that no later than each principal payment date and interest payment date for
this Bond it will make available to the Paying Agent/Registrar the amounts required to provide for the
payment, in immediately available funds by wire transfer or other means acceptable to the Paying
Agent/Registrar, of all principal of and interest on the Bonds, when due, in the manner set forth in the
ordinance authorizing the issuance of this Bond adopted by the City Council of the City on June 22, 1998
(the "Ordinance").
IF THE DATE for the payment of the principal of or interest on this Bond shall be a Saturday, a
Sunday, a legal holiday, or a day on which banking institutions in the city where the Paying AgentlRegistrar
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is located are authorized by law or executive order to close, then the date for such payment shall be the next
succeeding day which is not such a Saturday, Sunday, legal holiday, or day on which banking institutions are
authorized to close; and payment on such date shall have the same force and effect as if made on the original
date payment was due.
THIS BOND is one of a series of bonds of like tenor and effect, except as to denomination, number,
maturity, interest rate, and right of prior redemption, issued in the aggregate principal amount of $1,250,000
for the purpose of providing funds for constructing improvements to the City's Waterworks and Sanitary
Sewer System and for paying costs of issuance.
THE BONDS of this Series scheduled to mature on and after March 15, 2005 may be redeemed prior
to their scheduled maturities, in whole, or in part in principal amounts of $5,000 or any integral multiple
thereof, at the option of the City, on March 15, 2004, or on any date selected by the City thereafter, at the
redemption price of the par value plus accrued interest to the date fixed for redemption. If less than all of the
Bonds are to be redeemed by the City, the City shall determine the maturity or maturities and the amounts
therewith to be redeemed and shall direct the Paying Agent/Registrar to call by lot Bonds, or portions thereof,
within such maturity or maturities and in such principal amounts, for redemption.
AT LEAST 30 days prior to the date for any such redemption, a notice of such redemption shall be
sent by the Paying AgentlRegistrar by United States mail, first class, postage prepaid, to the registered owner
of each Bond, or portion thereof to be redeemed, at its address as it appeared on the Registration Books on
the 45th day prior to such redemption date and to major securities depositories, national bond rating agencies,
and bond information services; provided, however, that the failure to send, mail, or receive such notice, or
any defect therein or in the sending or mailing thereof, shall not affect the validity or effectiveness of the
proceedings for the redemption of any Bond. By the date fixed for any such redemption, due provision shall
be made by the Issuer with the Paying Agent/Registrar for the payment of the required redemption price for
this Bond or the portion hereof which is to be so redeemed, plus accrued interest thereon to the date fixed for
redemption. If such notice of redemption is given, and if due provision for such payment is made, all as
provided above, this Bond, or the portion thereof which is to be so redeemed, thereby automatically shall be
redeemed prior to its scheduled maturity, and shall not bear interest after the date fixed for its redemption,
and shall not be regarded as being outstanding except for the right of the registered owner to receive the
redemption price plus accrued interest to the date fixed for redemption from the Paying AgentlRegistrar out of
the funds provided for such payment. The Paying Agent/Registrar shall record in the Registration Books all
such redemptions of principal of this Bond or any portion hereof. If a portion of any Bond shaH be
redeemed, a substitute Bond or Bonds having the same maturity date, bearing interest at the same rate, in any
denomination or denominations in any integral multiple of $5,000, at the written request of the registered
owner, and in an aggregate principal amount equal to the unredeemed portion thereof, will be issued to the
registered owner upon the surrender thereof for cancellation, at the expense of the Issuer, all as provided in
the Ordinance.
ALL BONDS OF THIS SERIES are issuable solely as fully registered bonds, without interest
coupons, in the denomination of any integral multiple of $5,000. As provided in the Ordinance, this Bond, or
any unredeemed portion hereof, may, at the request of the registered owner or the assignee or assignees
hereof, be assigned, transferred, and exchanged for a like aggregate principal amount of fully registered
bonds, without interest coupons, payable to the appropriate registered owner, assignee, or assignees, as the
case may be, having the same maturity date, and bearing interest at the same rate, in any denomination or
denominations in any integral multiple of $5,000 as requested in writing by the appropriate registered owner,
assignee, or assignees, as the case may be, upon surrender of this Bond to the Paying AgentlRegistrar for
cancellation, all in accordance with the form and procedures set forth in the Ordinance. Among other
requirements for such assignment and transfer, this Bond must be presented and surrendered to the Paying
AgentlRegistrar, together with proper instruments of assignment, in form and with guarantee of signatures
satisfactory to the Paying AgentlRegistrar, evidencing assignment of this Bond or any portion or portions
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hereof in any integral multiple of $5,000 to the assignee or assignees in whose name or names this Bond or
any such portion or portions hereof is or are to be transferred and registered. The form of Assignment printed
or endorsed on this Bond may be executed by the registered owner to evidence the assignment hereof, but
such method is not exclusive, and other instruments of assignment satisfactory to the Paying Agent/Registrar
may be used to evidence the assignment of this Bond or any portion or portions hereof from time to time by
the registered owner. The City shall pay the Paying Agent/Registrar's reasonable standard or customary fees
and charges for transferring, converting, and exchanging any Bond or portion thereof; provided, however, that
any taxes or governmental charges required to be paid with respect thereto shall be paid by the one requesting
such transfer, conversion, and exchange. In any circumstance, neither the City nor the Paying Agent/Registrar
shall be required (I) to make any transfer or exchange during a period beginning at the opening of business
15 calendar days before the day of the first mailing of a notice of redemption of bonds and ending at the
close of business on the day of such mailing or (2) to transfer or exchange any Bonds so selected for
redemption when such redemption is scheduled to occur within 30 calendar days; provided, however, that
such limitation shall not be applicable to an exchange by the registered owner of the uncalled principal
balance of a Bond.
IN THE EVENT any Paying AgentlRegistrar for the Bonds is changed by the City, resigns, or
otherwise ceases to act as such, the City has covenanted in the Ordinance that it promptly will appoint a
competent and legally qualified substitute therefor, and promptly will cause written notice thereof to be
mailed to the registered owners of the Bonds.
BY BECOMING the registered owner of this Bond, the registered owner thereby acknowledges all of
the terms and provisions of the Ordinance, agrees to be bound by such terms and provisions, acknowledges
that the Ordinance is duly recorded and available for inspection in the official minutes and records of the
City, and agrees that the terms and provisions of this Bond and the Ordinance constitute a contract between
each registered owner hereof and the City.
THE CITY has reserved the right, subject to the restrictions stated in the Ordinance, to issue
additional parity revenue bonds which also may be made payable from, and secured by a first lien on and
pledge of, the "Pledged Revenues" (as defined in the Ordinance).
THE REGISTERED OWNER HEREOF shall never have the right to demand payment of this
obligation out of any funds raised or to be raised by taxation, or from any source whatsoever other than the
Pledged Revenues.
IT IS HEREBY certified and covenanted that this Bond has been duly and validly authorized, issued,
and delivered; that all acts, conditions, and things required or proper to be performed, exist, and be done
precedent to or in the authorization, issuance, and delivery of this Bond have been performed, existed, and
been done in accordance with law; that this Bond is a special obligation; and that the principal of and interest
on this Bond are payable from, and secured by a first lien on and pledge of, the Pledged Revenues, which
include the Net Revenues of the City's combined Waterworks and Sewer System.
IN TESTIMONY WHEREOF, the City Council has caused the seal of the City to be duly impressed
or placed in facsimile hereon, and this Bond to be signed with the imprinted facsimile signature of the Mayor
and countersigned by the facsimile signature of the City Secretary.
CITY OF LA PORTE, TEXAS
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
City Secretary
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
Mayor
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(SEAL)
FORM OF INITIAL BOND
The Initial Bond shall be in the form set forth above for the Definitive Bonds. except the following
shall replace the heading and the first paragraph and the Bond will be a continuous document:
NO. I-I
$1,250,000
United States of America
State of Texas
CITY OF LA PORTE, TEXAS
WATERWORKS AND SEWER SYSTEM REVENUE BOND,
SERIES 1998
Issue Date:
JUNE 15, 1998
Registered Owner:
PENSON FINANCIAL SERVICES, INC.
Principal Amount:
ONE MILLION TWO HUNDRED FIFTY THOUSAND DOLLARS ($1,250,000)
THE CITY OF LA PORTE, TEXAS (the "Issuer"), for value received, acknowledges itself indebted
to and hereby promises to pay to the order of the Registered Owner, specified above, or the registered assigns
thereof (the "Registered Owner"), the Principal Amount, specified above, with principal installments payable
on March 15 in each of the years, and bearing interest at per annum rates in accordance with the following
schedule:
YEARS OF
STATED MATURITIES
PRINCIPAL
INSTALLMENTS
$
INTEREST
RATE
%
(Information to be inserted from schedule in Section 2 hereof.)
INTEREST on the unpaid Principal Amount hereof from the Issue Date, specified above, or from the
most recent interest payment date to which interest has been paid or duly provided for until the Principal
Amount has become due and payment thereof has been made or duly provided for shall be paid computed on
the basis of a 360-day year of twelve 30-day months; such interest being payable on March 15 and September
15 of each year, commencing March 15, 1999.
THE PRINCIPAL OF AND INTEREST ON this Bond are payable in lawful money of the United
States of America, without exchange or collection charges. The final payment of principal of this Bond shall
be paid to the Registered Owner hereof upon presentation and surrender of this Bond at final maturity, at the
designated payment office of CHASE BANK OF TEXAS, NATIONAL ASSOCIATION, Houston, Texas,
which is the "Paying Agent/Registrar" for this Bond. The payment of principal installments and interest on
this Bond shall be made by the Paying AgentlRegistrar to the Registered Owner hereof as shown by the
Registration Books kept by the Paying AgentlRegistrar at the close of business on the Record Date by check
drawn by the Paying AgentlRegistrar on, and payable solely from, funds of the Issuer required to be on
deposit with the Paying AgentlRegistrar for such purpose as hereinafter provided; and such check shall be
sent by the Paying AgentlRegistrar by United States mail, postage prepaid, on each such payment date, to the
registered owner hereof at its address as it appears on the Registration Books kept by the Paying
AgentlRegistrar, as hereinafter described. The record date ("Record Date") for payments hereon means the
last calendar day of the month preceding a scheduled payment. In the event of a non-payment of interest on
a scheduled payment date, and for 30 days thereafter, a new record date for such payment (a "Special Record
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Date") will be established by the Paying Agent/Registrar, if and when funds for the payment thereof have
been received from the Issuer. Notice of the Special Record Date and of the scheduled payment date of the
past due payment (the "Special Payment Date", which shall be 15 calendar days after the Special Record
Date) shall be sent at least five business days prior to the Special Record Date by United States mail, first
class, postage prepaid, to the address of the Registered Owner appearing on the books of the Paying
Agent/Registrar at the close of business on the last business day next preceding the date of mailing of such
notice. The Issuer covenants with the Registered Owner that no later than each principal installment payment
date and interest payment date for this Bond it will make available to the Paying Agent/Registrar the amounts
required to provide for the payment, in immediately available funds, of all principal of and interest on the
Bond, when due, in the manner set forth in the ordinance authorizing the issuance of this Bond adopted by
the City Council of the City on June 22, 1998 (the "Ordinance").
FORM OF PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
(Not required on the Initial Bond)
PAYING AGENTIREGISTRAR'S AUTHENTICATION CERTIFICATE
It is hereby certified that this Bond has been issued under the provisions of the Ordinance described in
this Bond; and that this Bond has been issued in exchange for or replacement of a bond, bonds, or a portion
of a bond or bonds of an issue which originally was approved by the Attorney General of the State of Texas
and registered by the Comptroller of Public Accounts of the State of Texas.
Dated
CHASE BANK OF TEXAS,
NATIONAL ASSOCIATION,
Paying Agent/Registrar
By
Authorized Representative
FORM OF ASSIGNMENT
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned registered owner of this Bond, or duly authorized
representative or attorney thereof, hereby assigns this Bond to
I I
(Assignee's Social Security or Tax Payer
Identification number)
Print or type Assignee's name and address, including zip code)
and hereby irrevocably constitutes and appoints
attorney to transfer the registration of this Bond on the Paying Agent/Registrar's Registration Books with full
power of substitution in the prem ises.
Dated
Signature Guaranteed:
NOTICE: Signature(s) must be guaranteed by a
member firm of the New York Stock Exchange or
a commercial bank or trust company.
NOTICE: The signature above must correspond
with the name of the Registered Owner as it
appears upon the front of this Bond in every
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particular, without alteration or enlargement or any
change whatsoever.
The following abbreviations, when used in the assignment above or on the face of the within Bond,
shall be construed as though they were written out in full according to applicable laws or regulations:
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenant with right of survivorship and not as tenants in common
UNIF GIFT MIN ACT - Custodian
(Cust)
under Uniform Gifts to Minor Act
(Minor)
(State)
Additional abbreviations may also be used though not in the list above.
FORM OF REGISTRATION CERTIFICATE OF THE COMPTROLLER OF PUBLIC ACCOUNTS.
.To be printed or attached to Initial Bond only
COMPTROLLER'S REGISTRATION CERTIFICATE: REGISTER NO.
I hereby certify that this Bond has been examined, certified as to validity, and approved by the
Attorney General of the State of Texas, and that this Bond has been registered by the Comptroller of Public
Accounts of the State of Texas.
Witness .my signature and seal this
COMPTROLLER'S SEAL
Comptroller of Public Accounts of the State of Texas
[END OF FORMS]
Section 6. DEFINITIONS. As used in this Ordinance, the following terms shall have the meanings set
forth below, unless the text hereof specifically indicates otherwise:
(a) "Additional Bonds" means the additional parity obligations which the City reserves the right to
issue in the future, as provided in Section 14 of this Ordinance.
(b) "Bond" or "Bonds" means one or more, as the case may be, of the Bonds authorized to be issued
by this Ordinance.
(c) "City" and "Issuer" means the City of La Porte, Texas, or where appropriate the City Council
thereof.
(d) "City Council" means the governing body of the City.
(e) "Interest and Sinking Fund" means the fund provided for in Section 10 hereof.
(f) "Initial Purchasers" means Service Asset Management and R.W. Baird.
(g) "Net Revenues" means all gross revenues of the System after deducting the necessary and
reasonable expenses of operation and maintenance of the System, including all salaries, labor, material,
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repairs, and extensions necessary to render efficient service; provided, however, that only such repairs and
extensions, as in the judgment of the City Council, reasonably and fairly exercised, are necessary to keep the
System in operation and render adequate service to the City and the inhabitants thereof, or such as might be
necessary to meet some physical accident or condition which would otherwise impair the Parity Bonds shall
be deducted in determining the "Net Revenues". Depreciation and payments into and out of the Interest and
Sinking Fund and the Reserve Fund shall never be considered as expenses of operation and maintenance.
(h) "Parity Bonds" means collectively the Previously Issued Parity Bonds, the Bonds, and any
Additional Bonds.
(i) "Parity Bonds Ordinances" means collectively the ordinances authorizing the Previously Issued
Parity Bonds, the Bonds, and any Additional Bonds.
G> "Previously Issued Parity Bonds" means the outstanding "City of La Porte, Texas, Waterworks and
Sewer System Revenue Bonds, Series 1990", "City of La Porte, Texas, Waterwor~s and Sewer System
Revenue Refunding Bonds, Series 1991", and "City of La Porte, Texas Waterworks and Sewer System
Revenue Refunding Bonds, Series 1994".
(k) "Reserve Fund" means that fund described in Section II.
(I) "System" means the City's entire existing waterworks and sanity sewer system, together with all
future extensions, enlargements, additions, replacements, and improvements thereto.
(m) "System Fund" means that fund described in Section 9.
(n) "Year" or "fiscal year" means the regular fiscal year used by the City in connection with the
operation of the System, which may be any 12 consecutive months period established by the City.
Section 7. PLEDGE. The Parity Bonds, redemption premium, if any, and any interest payable
thereon, are and shall be secured by and payable from a first lien on and pledge of the Net Revenues, and the
Net Revenues are further pledged irrevocably to the establishment and maintenance of the Funds created by
the Parity Bonds Ordinances. The Parity Bonds are not and will not be secured by or payable from a
mortgage or deed of trust on any real, personal, or mixed properties constituting the System. The Registered
Owner of the Parity Bonds shall never have the right to demand payment of such obligations out of any funds
raised or to be raised by taxation, or from any source whatsoever other than the Net Revenues. This
Ordinance shall not be construed as requiring the City to expend any funds which are derived from sources
other than the operation of the System, but nothing herein shall be construed as preventing the City from
doing so.
Section 8. RATES. The City covenants and agrees with the holders of the Parity Bonds that it will:
(a) fix and maintain rates and collect charges for the facilities and services afforded by the System
which will provide revenues sufficient at all times:
(1) To pay all operation, maintenance, depreciation, replacement, and betterment charges of the
System;
(2) To establish and maintain the Interest and Sinking Fund;
(3) To generate in each year Net Revenues equal to one and twenty-five hundredths (1.25) times
the maximum annual requirement for the payment of the principal of and interest on the Parity Bonds
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"R1G~NAt.
at the time outstanding (although amounts shall be paid into the Interest and Sinking Fund and the
Reserve Fund only in accordance with Sections I 0 and II hereof); and
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(4) To pay all indebtedness outstanding against the System, other than the Parity Bonds, as and
when the same become due; and
(b) deposit as collected all revenues derived from the operation of the System into the System Fund.
Section 9. SYSTEM FUND. There has been created and established on the books of the City, and
accounted for separate and apart from all other funds of the City, a special fund entitled the "City of La Porte,
Texas, Waterworks and Sewer System Fund" (the "System Fund"). All gross revenues are and shall be
credited to the System Fund immediately upon receipt. The necessary and reasonable expenses of operation
and maintenance of the System shall first be paid from the System Fund upon approval of the City Council
and, from the Net Revenues available in the System Fund, the City shall then make substantially equal
monthly payments into the Interest and Sinking Fund (commencing with respect to the Bonds and any
Additional Bonds on the date of delivery to the initial purchaser thereof) during each year in which any of the
Parity Bonds are outstanding in an aggregate amount equal to 100% of the amounts required to meet the
interest and principal payments falling due on or before the next maturity date of the Parity Bonds. The City
shall, at least five days prior to March 15, 1999, and each September 15 and March 15 thereafter, deposit into
the Interest and Sinking Fund any additional Net Revenues available in the System Fund which may be
necessary to pay in full the interest on and principal, if any, coming due on such March 15 or September 15.
In no event shall any amount in excess of the amounts stated above be placed in the Interest and Sinking
Fund for the payment of the interest on or principal of the Parity Bonds, and any amount so placed may be
withdrawn by the City and replaced in the System Fund. Any funds remaining in the System Fund, after
provision for the necessary and reasonable cost of operating and maintaining the System, and after paying the
aforesaid amounts required to be paid into the Interest and Sinking Fund and the Reserve Fund, may be used
by the City for any lawful purpose.
Section 10. INTEREST AND SINKING FUND. For the sole purpose of paying the principal of and
interest on the Parity Bonds, as the same come due, there has been created and established on the books of
the City a separate fund entitled the "City of La Porte, Texas, Waterworks and Sewer System Bonds Interest
and Sinking Fund" (the "Interest and Sinking Fund").
Section 11. RESERVE FUND. There has been created and established on the books of the City at the
City's depository bank a separate fund entitled the "City of La Porte, Texas, Waterworks and Sewer System
Bonds Reserve Fund" (the "Reserve Fund"). The Reserve Fund shall be used to pay the principal of and
interest on any Parity Bonds when and to the extent the amounts in the Interest and Sinking Fund available
for such payment are insufficient for such purpose, and may be used for the purpose of finally retiring the last
of any Parity Bonds. Beginning on August 15, 1998 and ending June 30, 2003, the City shall, from the Net
Revenues in the System Fund, deposit into the Reserve Fund an amount of money in equal monthly amounts
(the "Monthly Reserve Deposit") to achieve the Reserve Requirement (hereinafter described).
Notwithstanding any provision hereof to the contrary, no deposits shall be made into the Reserve Fund at a
time when there is a deficiency in the amount on deposit in the Interest and Sinking Fund nor shall any
deposits be made into the Reserve Fund at any time it contains an amount equal to or greater than the
Reserve Requirement. If and whenever the balance in the Reserve Fund is reduced below the Reserve
Requirement, or if the City should fail timely to make any Monthly Reserve Deposit in full, then and in either
such event, the City shall, from the first available and unallocated Net Revenues of the following month or
months, cause amounts equal in the aggregate to any such deficiency to be set apart and transferred into the
Reserve Fund and such transfers shall be in addition to the amounts otherwise required to be deposited into
such Fund during such month or months. Surplus funds in the Reserve Fund resulting from any reduction of
the Reserve Requirement or otherwise shall be promptly transferred from the Reserve Fund into the Interest
and Sinking Fund, and payments into the Interest and Sinking Fund from the System Fund shall be reduced
accordingly. As used herein "Reserve Requirement" shall be the lesser of (I) 10% of the face amount of the
Parity Bonds, (2) 100% of the maximum annual debt service for the Parity Bonds, or (3) 125% of average
annual debt service for the Parity Bonds.
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. ORIGINAL
Section 12. INVESTMENTS. Money in any Fund established by the Parity Bonds Ordinances may, at
the option of the City, be placed or invested in "Permitted Investments" as defined and used herein to mean,
to the extent permitted by Texas law:
(I) direct obligations of (including obligations issued or held in book entry form on the books of) the
Department of Treasury of the United States of America;
(2) obligations of any of the following federal agencies which obligations represent full faith and
credit of the United States of America, including:
Export - Import Bank
Farmers Home Administration
U.S. Maritime Administration
Small Business Administration
Government National Mortgage Association (GNMA)
U.S. Department of Housing and Urban Development (PHA's)
Federal Housing Administration;
(3) bonds, notes, or other evidences of indebtedness rated "AAA" by Standard & Poor's Rating
Group ("S&P") and "Aaa" by Moody's Investors Service ("Moody's") issued by the Federal National
Mortgage Association or the Federal Home Loan Mortgage Corporation with remaining maturities not
exceeding three years; or
(4) U.S. dollar denominated deposit accounts, federal funds, and banker's acceptances with domestic
commercial banks which have a rating on their short term certificates of deposit on the date of purchase of
"A-I" or "A-1+" by S&P and "P-l" by Moody's and maturing no more than 360 days after the date of
purchase. (Ratings on holding companies are not considered as the rating of the bank);
Any obligation in which money from the Interest and Sinking Fund or the Reserve Fund are so
invested shall be kept and held in the depository bank of the City in escrow and in trust for the benefit of the
owners of the Parity Bonds, and shall be promptly sold and the proceeds of sale applied to the making of any
payments required to be made from the Interest and Sinking Fund or Reserve Fund, as the case may be.
Except as described in Section [20], all such investments shall at all times be a part of the Fund from which
the money used to acquire said investments shall have come and all earnings on such investments shall be
credited to, and losses thereon charged against, such Fund. Notwithstanding any provision hereof to the
contrary, any investment of money in the Interest and Sinking Fund shall be made so as to mature or be
subject to redemption at the option of the owner or holder thereof on or prior to the date or dates on which
money therefrom will be required.
Section 13. FUNDS SECURED. Money in all Funds created by this Ordinance, to the extent not
invested, shall be secured in the manner prescribed by law for securing funds of the City,
Section 14. ADDITIONAL BONDS. In addition to inferior lien bonds authorized by Article lilla,
Vernon's Texas Civil Statutes, as amended, the City expressly reserves the right hereafter to issue additional
parity bonds and other evidences of indebtedness now or hereafter authorized by the Legislature of Texas
(collectively, the "Additional Bonds"), and the Additional Bonds, when issued, may be secured by and
payable from a first lien on and pledge of the Net Revenues in the same manner and to the same extent as the
outstanding Parity Bonds but subject to the remaining provisions hereof, and the Previously Issued Parity
Bonds, the Bonds, and the Additional Bonds may be in all respects of equal dignity. It is provided, however,
that no Additional Bonds shall be issued unless:
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(a) The Interest and Sinking Fund, the Reserve Fund, and any similar fund or funds created by the
ordinance authorizing any Parity Bonds at the time outstanding shall each contain the amount then required to
be on deposit therein, and a certificate of such effect shall be executed and delivered by the Mayor and City
Secretary .
(b) An independent firm of certified public accountants, based upon an audit of the books of the
System, certifies that the net earnings of the System for the previous fiscal year, or for any 12 consecutive
month period ending not more than 90 days prior to the date of the adoption of the ordinance authorizing the
Additional Bonds, were equal to each of the following determined independently:
(i) at least 1.50 times the average annual requirements for the payment of the principal of and
interest on the Parity Bonds then outstanding and on such Additional Bonds, when issued, sold, and
delivered; and
(ii) at least 1.25 times the maximum annual requirement for the payment of the principal of and
interest on the Parity Bonds then outstanding and on such Additional Bonds, when issued, sold, and
delivered;
provided, however, should the certificate of the accountant certify that the net earnings of the System for the
period covered thereby were, in either case, less than required above, and a change in the rates and charges
for the services afforded by the System became effective at least 60 days prior to the scheduled date of
adoption of the ordinance authorizing such Additional Bonds, then such Additional Bonds may nevertheless
be issued if an independent engineer or engineering firm having a favorable reputation with respect to such
matters certifies that, had such change in rates and charges been effective for the entire period covered by the
accountant's certificate, the net earnings for the System for the fiscal year covered by the accountant's
certificate would have met the tests specified in (i) and (ii) above.
The term "net earnings" as used in this Section shall mean all of the Net Revenues of the System,
exclusive of income received specifically for capital items, and operation and maintenance expenses shall
exclude expenditures which under standard accounting practice should be charged to capital expenditures or
depreciations.
(c) Such Additional Bonds are made to mature on March 15th in each of the years in which they are
scheduled to mature.
(d) The City shall establish a reserve fund for such Additional Bonds by providing a cash reserve
fund therefor, a surety bond in lieu thereof, or a combination of such cash reserve fund and surety bond, all
as the City Council deems reasonable and appropriate and to the extent permitt~d by law provided that (i) the
amount of any such cash reserve fund or the coverage of any surety bond in lieu thereof or the amount of
such cash reserve fund and the coverage of such surety bond when added together shall at least equal the
maximum annual debt service requirements of such Additional Bonds, not to exceed the maximum permitted
by applicable regulations, procedures, or published rulings of the Internal Revenue Service (the "Reserve
Minimum"); (ii) if any cash reserve fund is funded by making transfers of Net Revenues in the System Fund,
such transfers shall be made each month in an amount reasonably sufficient to reach the Reserve Minimum
(or the portion thereof which is to be provided by such cash reserve fund) within a period of not more than
five years after such Additional Bonds are sold and delivered; (iii) any such cash reserve fund may be
combined with the Reserve Fund herein provided for the Bonds and with the cash reserve fund provided for
any Additional Bonds then outstanding in order ratably to secure all Parity Bonds then outstanding and the
Additional Bonds then being issued; (iv) any such surety bond provided in lieu of a cash reserve fund shall be
issued by an insurance company or association of companies whose insured obligations are rated by Moody's
Investors Service and by Standard & Poor's Rating Group in their highest rating categories; and (v) any such
surety bond may be written (or amended) to provide coverage not only for such Additional Bonds but also
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pro rata for the Parity Bonds then outstanding, provided, any existing cash reserve fund or surety fund in lieu
thereof which secures any such outstanding Parity Bonds is extended ratably to secure the Additional Bonds
then being issued; the replenishment of the cash portion and repayment of the insurer shall be made on a pro
rata basis; any bond proceeds withdrawn from the reserve fund shall be transferred to the Interest and Sinking
Fund. The obligation to reimburse the insurer under a surety bond for any expenses, claims, or draws under
such surety bond shall be made from deposits to be made to the reserve fund to replenish it, but such
payments to reimburse shall never constitute a separate obligation independent of the Bonds. It is the City's
intention hereby to provide maximum flexibility with respect to the reserve fund to be provided for any
Additional Bonds which may be issued hereafter and the foregoing provisions shall be liberally construed in
order to achieve that objective without materially prejudicing the rights and interests of the owners of any
Parity Bonds at the time outstanding.
Section 15. GENERAL COVENANTS. The City further covenants, warrants, and agrees that in
accordance with and to the extent required or permitted by law while the Parity Bonds are outstanding and
unpaid:
(a) Performance. It will faithfully perform at all times any and all covenants, undertakings,
stipulations, and provisions contained in each Parity Bonds Ordinance, and in each and every Parity Bond; it
will promptly payor cause to be paid the principal of and interest on every Parity Bond, on the dates and in
the places and manner prescribed in the Parity Bonds Ordinances; and it will, at the times and in the manner
prescribed, deposit or cause to be deposited the amounts required to be deposited into the Interest and Sinking
Fund and the Reserve Fund; and any holder of the Parity Bonds may require the City, its officials and
employees to carry out, respect, or enforce the covenants and obligations of the Parity Bonds Ordinances by
all legal and equitable means, including specifically, but without limitation, the use and filing of mandamus
proceedings in any court of competent jurisdiction against the City, its officials and employees.
(b) City's Legal Authoritv. It is a duly created and existing home rule city of the State of Texas, and
is duly authorized under the laws of the State of Texas to create and issue the Parity Bonds; it has the lawful
power to pledge the revenues supporting the Bonds and has lawfully exercised said power under the
Constitution and laws of the State of Texas, including said power existing under Articles IIII to 1118, both
inclusive, Revised Civil Statutes of the State of Texas, as amended; the Bonds issued hereunder shall be
ratably secured by said pledge of income, in such manner that one Bond shall have no preference over any
other Bond; all action on its part for the creation and issuance of said obligations has been duly and effec-
tively taken; and said obligations in the hands of the holders and owners thereof are and will be valid and
enforceable special obligations of the City in accordance with their terms.
(c) Title. It has or will obtain lawful title to the lands, buildings, structures, and facilities constituting
the System; it will defend the title to all the aforesaid lands, buildings, structures, and facilities, and every
part thereof, for the benefit of the holders and owners of the Parity Bonds, against the claims and demands of
all persons whomsoever; it is lawfully qualified to pledge the Net Revenues to the payment of the Parity
Bonds in the manner prescribed herein; and it has lawfully exercised such rights.
(d) Liens. It will from time to time and before the same become delinquent pay and discharge all
taxes, assessments and governmental charges, if any, which shall be lawfully imposed upon it or the System;
it will pay all lawful claims for rents, royalties, labor, materials, and supplies which if unpaid might by law
become a lien or charge thereon, the lien of which would be prior to or interfere with the liens hereof, so that
the priority of the liens granted hereunder shall be fully preserved in the manner provided herein; and it will
not create or suffer to be created any mechanic's, laborer's, materialman's or other lien or charge which might
or could be prior to the liens hereof, or do or suffer any matter or thing whereby the liens hereof might or
could be impaired; provided, however, that no such tax, assessment, or charge, and that no such claims which
might be used as the basis of a mechanic's, laborer's, materialman's, or other lien or charge, shall be required
to be paid so long as the validity of the same shall be contested in good faith by the City.
(e) Ooeration of System: No Free Service. It shall continuously and efficiently operate the System
and maintain the System in good condition, repair, and working order, all at reasonable cost. No free service
of the System shall be allowed, and should the City or any of its agencies or instrumentalities, lessees, or
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concessionaires make use of the services and facilities of the System, payment monthly of the standard retail
price of the services provided shall be made by the City or any of its agencies or instrumentalities, lessees, or
concessionaires out of funds from sources other than the revenues of the System, unless made from surplus
Net Revenues.
(f) Further Encumbrance. Other than for the payment of the Parity Bonds, the rents, revenues, and
income of the System have not in any manner been pledged to the payment of any debt or obligations of the
City or of the System; and it shall not additionally sell or encumber the Net Revenues in any manner, except
as permitted in the Parity Bonds Ordinances in connection with Additional Bonds, unless said encumbrance is
made junior and subordinate in all respects to the liens, pledges, covenants, and agreements of the Parity
Bonds Ordinances; but the right of the City to issue revenue bonds payable from a subordinate lien on the
surplus Net Revenues is specifically recognized and retained.
(g) Sale or Disposal of Property. It shall not sell, convey, mortgage, encumber, lease, or in any
manner transfer title to, or dedicate to other use, or otherwise dispose of the System, or any significant or
substantial part thereof; provided, however, that whenever the City deems it necessary to dispose of any other
property, machinery, fixtures, or equipment, or dedicate such property to other use, it may do so either when
it has made arrangements to replace the same or provide substitutes therefor, or it is determined by resolution
of the City Council that no such replacement or substitute is necessary.
(h) Insurance. It agrees to maintain insurance on the System, for the benefit of the registered owner
or owners of the Parity Bonds of a kind and in an amount which usually would be carried by private
companies engaged in a similar type of business in the same area.
(i) Records and Audits. It shall keep proper books and records and accounts, separate from all other
records and accounts, in which complete and correct entries shaIl be made of all transactions relating to the
System. Upon written request made not more than 60 days following the close of the fiscal year, the City
shall furnish to any holder of any Parity Bonds, complete financial statements of the System in reasonable
detail covering such fiscal year, certified by the City's Auditor. Any holders of 25% in principal amount of
the Parity Bonds at the time outstanding shall have the right at all reasonable times to inspect the System and
all records, accounts, and data of the City relating thereto.
G> Governmental Agencies. It has or will obtain and keep in full force and effect all franchises,
permits, authorization, and other requirements applicable to or necessary with respect to the acquisition,
construction, equipment, operation, and maintenance of the System, and it will comply with all of the terms
and conditions of any and all franchises, permits and authorizations applicable to or necessary with respect to
the System.
(k) No ComDetition. To the extent it legally may, it will not operate, grant any franchise, or permit
the acquisition, construction, or operation of, any facilities which would be in competition with the System,
and to the extent that it legally may, the City will prohibit any such competing facilities.
Section 16. AMENDMENT OF ORDINANCE. (a) The holders of the Parity Bonds aggregating in
principal amount 51 % of the aggregate principal amount of then outstanding Parity Bonds shall have the right
from time to time to approve any amendment to this Ordinance which may be deemed necessary or desirable
by the City; provided, however, that without the consent of the holders of all of the Parity Bonds at the time
outstanding, nothing herein contained shall permit or be construed to permit the amendment of the terms and
conditions in this Ordinance or in the Parity Bonds so as to:
(1) Make any change in the maturity of the outstanding Parity Bonds;
(2) Reduce the rate of interest borne by any of the outstanding Parity Bonds;
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(3) Reduce the amount of the principal payable on the outstanding Parity Bonds;
(4) Modify the terms of payment of principal of or interest on the outstanding Parity Bonds or
impose any conditions with respect to such payment;
(5) Affect the rights of the holders of less than all of the Parity Bonds then outstanding;
(6) Change the minimum percentage of the principal amount of Parity Bonds necessary for
consent to such amendment.
(b) If at any time the City shall desire to amend the Ordinance under this Section, the City shall
cause notice of the proposed amendment to be published in a financial newspaper or journal published in The
City of New York, New York, once during each calendar week for at least two successive calendar weeks.
Such notice shall briefly set forth the nature of the proposed amendment and shall state that a copy thereof is
on file at the principal office of the Paying Agent/Registrar for inspection by all holders of Parity Bonds.
Such publication is not required, however, if notice in writing is given to each holder of the Previously Issued
Parity Bonds, Bonds, and Additional Bonds.
(c) Whenever at any time not less than 30 days, and within one year, from the date of the first
publication of said notice or other service of written notice the City shall receive an instrument or instruments
executed by the holders of at least 51 % in aggregate principal amount of all Parity Bonds then outstanding,
which instrument or instruments shall refer to the proposed amendment described in said notice and which
specifically consent to and approve such amendment in substantially the form of the copy thereof on file with
the Paying Agent/Registrar, the City Council may pass the amendatory ordinance in substantially the same
form.
(d) Upon the passage of any amendatory ordinance pursuant to the provisions of this Section, this
Ordinance shall be deemed to be amended in accordance with such amendatory ordinance, and the respective
rights, duties and obligations under this Ordinance of the City and all the holders of then outstanding Parity
Bonds shall thereafter be determined, exercised and enforced hereunder, subject in all respects to such
amendments.
(e) Any consent given by the holder of a Parity Bond pursuant to the provisions of this Section shall
be irrevocable for a period of six months from the date of the first publication of the notice provided for in
this Section, and shall be conclusive and binding upon all future holders of the same Parity Bond during such
period. Such consent may be revoked at any time after six months from the date of the first publication of
such notice by the holder who gave such consent, or by a successor in title, by filing notice thereof with the
Paying Agent and the City, but such revocation shall not be effective if the holders of 51 % in aggregate
principal amount of the then outstanding Parity Bonds as in this Section defined have, prior to the attempted
revocation, consented to and approve the amendment.
(f) For the purpose of this Section the fact of the holding of Parity Bonds issued in registered form
without coupons and the amounts and numbers of such Parity Bonds and the date of their holding same shall
be proved by the Registration Books of the Paying Agent/Registrar. For purposes of this Section, the holder
of a Parity Bond shall be the owner thereof as shown on such Registration Books. The City may
conclusively assume that such ownership continues until written notice to the contrary is served upon the
City.
(g) The foregoing provisions of this Section notwithstanding, the City by action of the City Council
may amend this Ordinance for anyone or more of the following purposes:
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(1) To add to the covenants and agreements of the City in this Ordinance contained, other
covenants and agreements thereafter to be observed, grant additional rights or remedies to
bondholders, or to surrender, restrict, or limit any right or power herein reserved to or conferred upon
the City;
(2) To make such provisions for the purpose of curing any ambiguity, or curing, correcting, or
supplementing any defective provision contained in this Ordinance, or in regard to clarifying matters
or questions arising under this Ordinance, as are necessary or desirable and not contrary to or
inconsistent with this Ordinance and which shall not adversely affect the interests of the holders of
the Parity Bonds;
(3) To modify any of the provisions of this Ordinance in any other respect whatever, provided
that (i) such modification shall be, and be expressed to be, effective only after all Parity Bonds
outstanding at the date of the adoption of such modification shall cease to be outstanding, and (ii)
such modification shall be specifically referred to in the text of all Additional Bonds issued after the
date of the adoption of such modification.
Section 17. BOOK-ENTRY ONLY SYSTEM. It is intended that the Bonds initially be registered so
as to participate in a securities depository system (the "DTC System ") with The Depository Trust Company,
New York, New York, or any successor entity thereto ("DTC"), as set forth herein. The definitive Bonds
shall be issued in the form of a separate single definitive Bond for each maturity. Upon issuance, the
ownership of each such Bond shall be registered in the name of Cede & Co., as the nominee of DTC, and all
of the outstanding Bonds shall be registered in the name of Cede & Co., as the nominee of DTC. The City
and the Paying Agent/Registrar are authorized to execute, deliver, and take the actions set forth in such letters
to or agreements with DTC as shall be necessary to effectuate the DTC System, including a "Letter of
Representation" (the "Representation Letter").
With respect to the Bonds registered in the name of Cede & Co., as nominee of DTC, the City and
the Paying Agent/Registrar shall have no responsibility or obligation to any broker-dealer, bank, or other
financial institution for which DTC holds the Bonds from time to time as securities depository (a "Depository
Participant") or to any person on behalf of whom such a Depository Participant holds an interest in the Bonds
(an "Indirect Participant"). Without limiting the immediately preceding sentence, the City and the Paying
AgentlRegistrar shall have no responsibility or obligation with respect to (i) the accuracy of the records of
DTC, Cede & Co., or any Depository Participant with respect to any ownership interest in the Bonds, or (ii)
the delivery to any Depository Participant or any Indirect Participant or any other Person, other than a
registered owner of a Bond, of any amount with respect to principal of, premium, if any, or interest on the
Bonds. While in the DTC System, no person other than Cede & Co., or any successor thereto, as nominee
for DTC, shall receive a Bond evidencing the obligation of the City to make payments of principal, premium,
if any, and interest pursuant to this Ordinance. Upon delivery by DTC to the Paying Agent/Registrar of
written notice to the effect that DTC has determined to substitute a new nominee in place of Cede & Co., and
subject to the provisions in this Ordinance with respect to interest checks or drafts being mailed to the holder,
the word "Cede & Co." in this Ordinance shall refer to such new nominee of DTC.
In the event that (a) the City determines that DTC is incapable of discharging its responsibilities
described herein and in the Representation Letter, (b) the Representation Letter shall be terminated for any
reason, or (c) DTC or the City determines that it is in the best interest of the beneficial owners of the Bonds
that they be able to obtain certificated Bonds, the City shall notify the Paying Agent/Registrar, DTC, and
Depository Participants of the availability within a reasonable period of time through DTC of certificated
certificates, and the Bonds shall no longer be restricted to being registered in the name of Cede & Co., as
nominee of DTC. At that time, the City may determine that the Bonds shall be registered in the name of and
deposited with a successor depository operating a securities depository system, as may be acceptable to the
City, or such depository's agent or designee, and if the City and the Paying Agent/Registrar do not select
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such alternate securities depository system then the Bonds may be registered in whatever names the registered
owners of Bonds transferring or exchanging the Bonds shall designate, in accordance with the provisions
hereof.
Notwithstanding any other provision of this Ordinance to the contrary, so long as any Bond is
registered in the name of Cede & Co., as nominee of DTC, all payments with respect to principal of,
premium, if any, and interest on such Bond and all notices with respect to such Bond shall be made and
given, respectively, in the manner provided in the Representation Letter.
Section 18. DAMAGED. MUTILATED. LOST. STOLEN. OR DESTROYED BONDS. (a) In the
event any outstanding Bond is damaged, mutilated, lost, stolen, or destroyed, the Paying Agent/Registrar shall
cause to be printed, executed, and delivered, a new bond of the same principal amount, maturity, and interest
rate, as the damaged, mutilated, lost, stolen, or destroyed Bond, in replacement for such Bond in the manner
hereinafter provided.
(b) Application for replacement of damaged, mutilated, lost, stolen, or destroyed Bonds shall be made
to the Paying Agent/Registrar. In every case of loss, theft, or destruction of a Bond, the applicant for a
replacement bond shall furnish to the City and to the Paying AgentlRegistrar such security or indemnity as
may be required by them to save each of them harmless from any loss or damage with respect thereto. Also,
in every case of loss, theft, or destruction of a Bond, the applicant shall furnish to the City and to the Paying
AgentlRegistrar evidence to their satisfaction of the loss, theft, or destruction of such Bond, as the case may
be. In every case of damage or mutilation of a Bond, the applicant shall surrender to the Paying
AgentlRegistrar for cancellation the Bond so damaged or mutilated.
(c) Notwithstanding the foregoing provisions of this Section, in the event any such Bond shall have
matured, and no default has occurred which is then continuing in the payment of the principal of, redemption
premium, if any, or interest on the Bond, the City may authorize the payment of the same (without surrender
thereof expect in the case of a damaged or mutilated Bond) instead of issuing a replacement Bond, provided
security or indemnity is furnished as above provided in this Section.
(d) Prior to the issuance of any replacement bond, the Paying Agent/Registrar shall charge the owner
of such Bond with all legal, printing, and other expenses in connection therewith. Every replacement bond
issued pursuant to the provisions of this Section by virtue of the fact that any Bond is lost, stolen, or
destroyed shall constitute a contractual obligation of the City whether or not the lost, stolen or destroyed
Bond shall be found at any time, or be enforceable by anyone, and shall be entitled to all the benefits of this
Ordinance equally and proportionately with any and all other Bonds duly issued under this Ordinance.
(e) In accordance with Section 6 of Article 717k-6, Vernon's Texas Civil Statutes, as amended, this
Section of this Ordinance shall constitute authority for the issuance of any such replacement bond without
necessity of further action by the governing body of the City or any other body or person, and the duty of the
replacement of such bonds is hereby authorized and imposed upon the Paying Agent/Registrar, and the Paying
Agent/Registrar shall authenticate and deliver such bonds in the form and manner and with the effect, as
provided in Section 4 of this Ordinance for Bonds issued in exchange for other Bonds.
Section 19. DEFEASANCE OF THE BONDS. (a) Any Bond and the interest thereon shall be
deemed to be paid, retired, and no longer outstanding (a "Defeased Bond") within the meaning of this
Ordinance, except to the extent provided in subsection (d) of this Section, when payment of the principal of
such Bond, plus interest thereon to the due date (whether such due date be by reason of maturity, upon
redemption, or otherwise) either (i) shall have been made or caused to be made in accordance with the terms
thereof (including the giving of any required notice of redemption), or (ii) shall have been provided for on or
before such due date by irrevocably depositing with or making available to the Paying Agent/Registrar for
such payment (I) lawful money of the United States of America sufficient to make such payment or (2) direct
19
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obligations of the United States of America, including obligations the principal of and interest on which are
unconditionally guaranteed by the United States of America, which may be United States Treasury obligations
such as its State and Local Government Series, and which may be book entry form (herein "Government
Obligations") which mature as to principal and interest in such amounts and at such time as will insure the
availability, without reinvestment, of sufficient money to provide for such payment, and when proper
arrangements have been made by the City with the Paying Agent/Registrar for the payment of its services
until all Defeased Bonds shall have become due and payable. At such time as a Bond shall be deemed to be
a Defeased Bond hereunder, as aforesaid, such Bond and the interest thereon shall no longer be secured by,
payable from, or entitled to the benefits of, the revenue herein levied and pledged as provided in this
Ordinance, and such principal and interest shall be payable solely from such money or Government
Obligations.
(b) Any money so deposited with the Paying Agent/Registrar may at the written direction of the City
also be invested as hereinbefore set forth, and all income from such Government Obligations received by the
Paying Agent/Registrar which is not required for the payment of the Bonds and interest thereon, with respect
to which such money has been so deposited, shall be turned over to the City, or deposited as directed in
writing by the City.
(c) Until all Defeased Bonds shall have become due and payable, the Paying Agent/Registrar shall
perform the services of Paying AgentlRegistrar for such Defeased Bonds the same as if they had not been
defeased, and the City shall make proper arrangements to provide and pay for such services as required by
this Ordinance.
Section 20. TAX COVENANTS. (a) The City covenants to take any action to maintain, or refrain
from any action which would adversely affect, the treatment of the Bonds as obligations described in section
103 of the Internal Revenue Code of 1986, as amended (the "Code"), the interest on which is not includable
in "gross income" for federal income tax purposes. In furtherance thereof, the City specifically covenants as
follows:
(i) To refrain from taking any action which would result in the Bonds being treated as "private
activity bonds" within the meaning of section 141(a) of the Code;
(ii) To take any action to assure that no more than 10% of the proceeds of the Bonds or the
projects financed therewith are used for any "private business use," as defined in section 141(b)(6) of
the Code or, if more than 10% of the proceeds or the projects financed therewith are so used, that
amounts, whether or not received by the City with respect to such private business use, do not under
the terms of this Resolution or any underlying arrangement, directly or indirectly, secure or provide
for the payment of more than 10% of the debt service on the Bonds, in contravention of section
141(b)(2) of the Code;
(iii) To take any action to assure that in the event that the "private business use" described in
paragraph (ii) hereof exceeds 5% of the proceeds of the Bonds or the projects financed therewith,
then the amount in excess of 5% is used for a "private business use" which is "related" and not
"disproportionate," within the meaning of section 141(b)(3) of the Code, to the governmental use;
(iv) To take any action to assure that no amount which is greater than the lesser of $5,000,000 or
5% of the proceeds of the Bonds is directly or indirectly used to finance loans to persons, other than
state or local governmental units, in contravention of section 141(c) of the Code;
(v) To refrain from taking any action which would result in the Bonds being "federally
guaranteed" within the meaning of section 149(b) of the Code;
20
e
~R I G I ~f /~;
(vi) Except to the extent permitted by section 148 of the Code and the regulations and rulings
thereunder, to refrain from using any portion of the proceeds of the Bonds, directly or indirectly, to
acquire or to replace funds which were used, directly or indirectly, to acquire investment property (as
defined in section 148(b)(2) of the Code) which produces a materially higher yield over the term of
the Bonds.
(vii) To otherwise restrict the use of the proceeds of the Bonds or amounts treated as proceeds of
the Bonds, as may be necessary, so that the Bonds do not otherwise contravene the requirements of
section 148 of the Code (relating to arbitrage) and, to the extent applicable, section 149(d) of the
Code (relating to advance refundings);
(viii) Except to the extent otherwise provided in section 148(f) of the Code and the regulations
and rulings thereunder, to pay to the United States of America at least once during each five year
period (beginning on the date of delivery of the Bonds) an amount that is at least equal to 90% of the
"Excess Earnings," within the meaning of section 148(f) of the Code, and to pay to the United States
of America, not later than 60 days after the Bonds have been paid in full, 100% of the amount then
required to be paid as a result of Excess Earnings under section 148(f) of the Code;
(ix) To maintain such records as will enable the City to fulfill its responsibilities under this
subsection and sections 141 and 148 of the Code and to retain such records for at least six years
following the final payment of principal and interest on the Bonds; and
(x) To comply with the information reporting requirements of section 149(e) of the Code.
For the purposes of the foregoing; in the case of a refunding bond, the term proceeds includes transferred
proceeds and, for purposes of paragraphs (ii) and (iii), proceeds of the refunded bonds.
The covenants contained herein are intended to assure compliance with the Code and any regulations
or rulings promulgated by the U.S. Department of Treasury pursuant thereto. In the event that regulations or
rulings are hereafter promulgated which modify or expand provisions of the Code, as applicable to the Bonds,
the City will not be required to comply with any covenant contained herein to the extent that such
modification or expansion, in the opinion of nationally-recognized bond counsel, will not adversely affect the
exclusion from gross income of interest on the Bonds under section 103 of the Code. In the event that
regulations or rulings are hereafter promulgated which impose additional requirements which are applicable to
the Bonds, the City agrees to comply with the additional requirements to the extent necessary, in the opinion
of nationally-recognized bond counsel, to preserve the exclusion from gross income of interest on the Bonds
under section 103 of the Code.
Proper officers of the City charged with the responsibility of issuing the Bonds are hereby authorized
and directed to execute any documents, certificates, or reports required by the Code and to make such
elections, on behalf of the City, which may be permitted by the Code as are consistent with the purpose for
the issuance of the Bonds.
Notwithstanding any other provision in this Resolution, to the extent necessary to preserve the
exclusion from gross income of interest on the Bonds under section 103 of the Code the covenants contained
in this subsection shall survive the later of the defeasance or discharge of the Bonds.
(b) Covenants Regarding Sale. Lease. or DisDosition of Financed ProDertv. The City covenants that
the City will regulate the use of the property financed, directly or indirectly, with the proceeds of the Bonds
and will not sell, lease, or otherwise dispose of such property unless (i) the City takes the remedial measures
as may be required by the Code and the regulations and rulings thereunder in order to preserve the exclusion
21
e
O~GINAL
from gross income of interest on the Bonds under section 103 of the Code or (ii) the City seeks the advice of
nationally-recognized bond counsel with respect to such sale, lease, or other disposition.
Section 21. DESIGNATION AS OUALIFIED TAX-EXEMPT OBLIGATIONS. The City hereby
designates the Bonds as "qualified tax-exempt obligations" as defined in section 265(b)(3) of the Code. In
furtherance of such designation, the City represents, covenants, and warrants the following: (a) during the
calendar year in which the Bonds are issued, the City (including any subordinate entities) has not designated
nor will designate obligations, which when aggregated with the Bonds, will result in more than $10,000,000
of "qualified tax-exempt obligations" being issued; (b) the City reasonably anticipates that the amount of
tax-exempt obligations issued during 1998 by the City (including any subordinate entities) will not exceed
$10,000,000; and (c) the City wiII take such action which would assure, or to refrain from such action which
would adversely affect, the treatment of the Bonds as "qualified tax-exempt obligations."
Section 22. SALE OF BONDS. The sale of the Bonds to the Initial Purchasers pursuant to the taking
of competitive bids at a price of par, plus accrued interest to the date of delivery and a premium of $100 is
hereby confirmed. It is hereby officially found, determined, and declared that the Initia:l Purchasers submitted
the bid which results in the lowest true interest cost to the Issuer and delivery of the Bonds to the Initial
Purchasers shall be made as soon as practicable after the adoption of this Ordinance, upon payment therefor,
in accordance with the terms of sale. The Initial Bond shall be registered in the name of Penson Financial
Services, Inc. The officers of the Issuer are hereby authorized and directed to execute and deliver such
certificates, instructions, or other instruments as are required or necessary to accomplish the purposes of this
Ordinance.
Section 23. PROCEEDS OF SALE. The proceeds of the Bonds shall be placed into the Interest and
Sinking Fund and the Construction Fund of the Issuer as follows:
(a) Interest and SinkiDl! Fund. An amount equal to the accrued interest on the Bonds from the date
of the Bonds to the date of delivery to the Initial Purchasers shall be deposited in the Interest and Sinking
Fund.
(b) Construction Fund. The proceeds of the Bonds remaining after the above described deposit into
the Interest and Sinking Fund shall be placed in the Construction Fund (hereby created) to be used by the
Issuer for the purposes described in this Ordinance.
Section 24. APPROVAL OF OFFICIAL STATEMENT. The Issuer hereby approves the form and
content of the Official Statement relating to the Bonds, and any addenda, supplement, or amendment thereto
and approves the distribution of such Official Statement in the reoffering of the Bonds by the Initial
Purchasers in final form, with such changes therein or additions thereto as the officer executing the same may
deem advisable, such determination to be conclusively evidenced by his execution thereof. It is further
officially found determined and declared that the statements and representations contained in said Official
Statement are true and correct in all material respects to the best knowledge and belief of the Council.
Section 25. APPROVAL AND REGISTRATION OF BONDS. The Mayor of the City is hereby
authorized to have control of the Bonds and all necessary records and proceedings pertaining to the Bonds
pending their delivery and their investigation, examination, and approval by the Attorney General of the State
of Texas, and their registration by the Comptroller of Public Accounts of the State of Texas. Upon
registration of the Bonds, said Comptroller of Public Accounts (or a deputy designated in writing to act for
said Comptroller) shall manually sign the Comptroller's Registration Certificate. The Bonds thus registered
shall remain in the custody of the Mayor (or his designee) until delivered to the purchaser thereof.
Section 26. FURTHER PROCEDURES. The Mayor, the City Secretary, and all other officers,
employees, and agents of the City, and each of them, shall be and they are hereby expressly authorized,
22
e
ORI~AL
empowered, and directed form time to time and at any time to do and perform all such acts and things and to
execute, acknowledge, and deliver in the name and under the corporate seal and on behalf of the City all such
instruments, whether or not herein mentioned, as may be necessary or desirable in order to carry out the terms
and provisions of this Ordinance. The Official Statement, dated June 8, 1998, and other documents used in
connection with the sale of the Bonds are hereby approved and the Mayor of the City is hereby directed and
authorized to execute on behalf of the City, and the City Secretary is hereby authorized to attest, the Official
Statement and other sale documents.
Section 27. SEVERABILITY. The provisions of this Ordinance are severable; and in case anyone or
more of the provisions of this Ordinance or the application thereof to any person or circumstance should be
held to be invalid, unconstitutional, or ineffective as to any person or circumstance, the remainder of this
Ordinance nevertheless shall be valid, and the application of any such invalid provision to persons or
circumstances other than those as to which it is held invalid shall not be affected thereby.
Section 28. CONTINUING DISCLOSURE UNDERTAKING. (a) Annual Reoorts. The City shall
provide annually to each nationally-recognized municipal securities information repository ("NRMSIR") and
to any state information depository ("SID"), within six months after the end of each fiscal year ending in or
after 1998, financial information and operating data with respect to the City of the general type included in
the final Official Statement authorized by Section 24 of this Ordinance, being the information described in
Exhibit B hereto. Any financial statements so to be provided shall be (1) prepared in accordance with the
accounting principles described in Exhibit B hereto and (2) audited, if the City commissions an audit of such
statements and the audit is completed within the period during which they must be provided. If the audit of
such financial statements is not complete within such period, the City shall provide audited financial
statements for the applicable fiscal year to each NRMSIR and any SID when and if the audit report on such
statements becomes available.
If the City changes its fiscal year, it will notify each NRMSIR and any SID of the change (and of the
date of the new fiscal year end) prior to the next date by which the City otherwise would be required to
provide financial information and operating data pursuant to this Section.
The financial information and operating data to be provided pursuant to this Section may be set forth
in full in one or more documents or may be included by specific reference to any document (including an
official statement or other offering document) if it is available from the Municipal Securities Rulemaking
Board (the "MSRB") that theretofore has been provided to each NRMSIR and any SID or filed with the SEC.
(b) Material Event Notices. The City shall notify any SID and either each NRMSIR or the MSRB, in
a timely manner, of any of the following events with respect to the Bonds, if such event is material within the
meaning of the federal securities laws: (i) principal and interest payment delinquencies; (ii) non-payment
related defaults; (iii) unscheduled draws on debt service reserves reflecting financial difficulties; (iv)
unscheduled draws on credit enhancements reflecting financial difficulties; (v) substitution of credit or
liquidity providers, or their failure to perform; (vi) adverse tax opinions or events affecting the tax-exempt
status of the Bonds; (vii) modifications to rights of holders of the Bonds; (viii) calls; (ix) defeasances; (x)
release, substitution, or sale of property securing repayment of the Bonds; and (xi) rating changes.
The City shall notify any SID and either each NRMSIR or the MSRB, in a timely manner, of any
failure by the City to provide financial information or operating data in accordance with this Section by the
time required by this Section.
(c) Limitations. Disclaimers. and Amendments. The City shall be obligated to observe and perform
the covenants specified in this Section for so long as, but only for so long as, the City remains an "obligated
person" with respect to the Bonds within the meaning of Rule 15c2-12 (the "Rule"), except that the City in
any event will give notice of any deposit made in accordance with Section 17 above that causes the Bonds no
longer to be outstanding and any call of Bonds made in connection therewith.
23
e
ORIG1N~L
The provisions of this Section are for the sole benefit of the Owners and beneficial owners of the
Bonds, and nothing in this Section, express or implied, shall give any benefit or any legal or equitable right,
remedy, or claim hereunder to any other person. The City undertakes to provide only the financial
information, operating data, financial statements, and notices which it has expressly agreed to provide
pursuant to this Section and does not hereby undertake to provide any other information that may be relevant
or material to a complete presentation of the City's financial results, condition, or prospects or hereby
undertake to update any information provided in accordance with this Section or otherwise, except as
expressly provided herein. The City does not make any representation or warranty concerning such
information or its usefulness to a decision to invest in or sell Bonds at any future date.
UNDER NO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE OWNER OR
BENEFICIAL OWNER OF ANY CERTIFICATE OR ANY OTHER PERSON, IN CONTRACT OR TORT,
FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM ANY BREACH BY THE CITY,
WHETHER NEGLIGENT OR WITHOUT FAULT ON ITS PART, OF ANY COVENANT SPECIFIED IN
THIS SECTION, BUT EVERY RIGHT AND REMEDY OF ANY SUCH PERSON, IN CONTRACT OR
TORT, FOR OR ON ACCOUNT OF ANY SUCH BREACH SHALL BE LIMITED TO AN ACTION FOR
MANDAMUS OR SPECIFIC PERFORMANCE.
No default by the City in observing or performing its obligations under this Section shall comprise a
breach of or default under this Ordinance for purposes of any other provisions of this Ordinance.
Nothing in this Section is intended or shall act to disclaim, waive, or otherwise limit the duties of the
City under federal and state securities laws.
The provisions of this Section may be amended, supplemented, or repealed by the City from time to
time under the following circumstances, but not otherwise: (I) to adapt to changed circumstances that arise
from a change in legal requirements, a change in law, or a change in the identity, nature, status, or type of
operations of the City, if the provisions of this Section, as so supplemented or amended, would have
permitted an underwriter to purchase or sell Bonds in the present offering in compliance with the Rule and
either the Owners of a majority in aggregate principal amount of the outstanding Bonds consent to such
amendment, supplement, or repeal, or any State agency or official determines that such amendment,
supplement, or repeal will not materially impair the interests of the beneficial owners of the Bonds, (2) upon
repeal of the applicable provisions of the Rule, or any judgment by a court of final jurisdiction that such
provisions are invalid, or (3) in any other circumstance or manner permitted by the Rule.
24
.
OR~GH~AL e
Section 29. MISCELLANEOUS. (a) Titles Not Restrictive. The titles assigned to the various
sections of this Ordinance are for convenience only and shall not be considered restrictive of the subject
matter of any section or of any part of this Ordinance.
(b) Inconsistent Provisions. All ordinances, orders, and resolutions, or parts thereof, which are in
conflict or inconsistent with any provision of this Ordinance are hereby repealed and declared to be
inapplicable, and the provisions of this Ordinance shall be and remain controlling as to the matters prescribed
herein.
(c) Severabilitv. If any word, phrase, clause, paragraph, sentence, part, portion, or provision of this
Ordinance or the application thereof to any person or circumstances shall be held to be invalid, the remainder
of this Ordinance shall nevertheless be valid and the Council hereby declares that this Ordinance would have
been enacted without such invalid word, phrase, clause, paragraph, sentence, part, portion, or provisions.
(d) Governine: Law. This Ordinance shall be construed and enforced in accordance with the laws of
the State of Texas.
(e) Effective Date. This Ordinance shall take effect and be in full force and effect from and after the
date of its passage, and it is so ordained.
PASSED AND APPROVED this June 22, 1998.
/s/ Alton E. Porter
Mayor Pro Tem, City of La Porte, Texas
ATTEST:
Is/ Martha Gillett
City Secretary, City of La Porte, Texas
25
.
ORJG/t'~ALe
EXHIBIT A
PAYING AGENTIREGISTRAR AGREEMENT
The Paying Agent/Registrar Agreement is found in executed form at Tab 7.
A-I
.
O~IGINAL
EXHIBIT B
DESCRIPTION OF ANNUAL FINANCIAL INFORMA nON
The following information is referred to in Section 28 of this Ordinance.
Annual Financial Statements and Operating Data
The financial information and operating data with respect to the City to be provided annually in
accordance with such Section are as specified and included in the Appendix or under the headings of the
Official Statement referred to below:
1. The audited fmancial statements of the City for the most recently concluded fiscal year.
2. The information included in the Official Statement under the headings "FINANCIAL
INFORMATION", "COMPUTATION OF SELF-SUPPORTING DEBT", "DEBT SERVICE FUND
MANAGEMENT INDEX", "GENERAL FUND REVENUES, EXPENDITURES, AND BALANCES - FIVE
YEAR HISTORY", "UTILITY DEPARTMENT", "WATERWORKS AND SEWER SYSTEM OPERATING
STATEMENTS", "CUSTOMER COUNT", "TOP TEN WATER CUSTOMERS", "WATERWORKS &
SEWER SYSTEM REVENUE BONDS", "PRINCIPAL REPAYMENT SCHEDULE", and "ESTIMATED
DEBT SERVICE REQUIREMENT SCHEDULE".
Accounting Principles
The accounting principles referred to in such Section are the accounting principles described in the
notes to the financial statements referred to in paragraph 1 above, as such principles may be changed from
time to time to comply with state law or regulation.
B-1
.
.
OR~G\NAL
CERTIFICATE FOR ORDINANCE
We, the undersigned Mayor and City Secretary of the City of La Porte, Texas (the "City"), hereby certify
as follows:
1. The City Council of the City (the "Council") convened in regular session, open to the public, on June
22, 1998 at the meeting place designated in the notice (the "Meeting"), and the roll was called of the members, to
wit: Norman L. Malone, Mayor, and the following City Councilmembers: Guy Sutherland, Chuck Engelken, Howard
Ebow, Deotis Gay, Charlie Young, Jerry Clarke, Bob McLaughlin, and Alton Porter. All members of the Council
were present, except Ma yor Malone . constituting a qUOi"um. Whereupon among
other business, the following was transacted at the Meeting: a written ordinance entitled
ORDINANCE AUTHORIZING THE ISSUANCE OF$1,250",000 CITY OF LA PORTE, TEXAS
WATERWORKS AND SEWER SYSTEM REVENUE BONDS, SERIES 1998, AND ALL
OTHER MATTERS RELATED THERETO
(the "Ordinance") was duly introduced for the consideration of the Council and read in full. It was then duly moved
and seconded that the Ordinance be finally passed and adopted; and after due discussion, such motion, carrying with
it the adoption of the Ordinance, prevailed and carried by the following vote:
YES: 8
NOES: 0
ABSTENTIONS:
o
2. A true, full, and correct copy of the Ordinance adopted at the Meeting is attached to and follows this
Certificate; the Ordinance has been duly recorded in the Council's minutes of the Meeting; the above and foregoing
paragraph is a true, full, and correct excerpt from the Council's minutes of the Meeting pertaining to the adoption
of the Ordinance; the persons named in the above and foregoing paragraph are duly chosen, qualified, and acting
officers and members of the Council as indicated therein; each of the officers and members of the Council was duly
and sufficiently notified officially and personally, in advance, of the time, place, and purpose of the Meeting, and
that the Ordinance would be introduced and considered for adoption at the Meeting, and each of such officers and
members consented, in advance, to the holding of the Meeting for such purpose; and the Meeting was open to the
public, and public notice of the time, place, and purpose of the Meeting was given, all as required by Chapter 551,
Texas Government Code.
3. Martha Gillett is the duly appointed and acting City Secretary of the City.
SIGNED AND SEALED this June 22, 1998.
1JJrJ~(). .I1iJJdl
City;;. SecretaJ:y
,City: of La Port~: Texas
. (CITY SEAL)
~V~
Mayor Pro Tern
City of La Porte, Texas
.
.
OR~GINAL
AKIN, GUMP, STRAUSS, HAUER & FELD, L.L.P.
ATTORNEYS AT LAW
AUSTIN
BRUSSELS
DALLAS
HOUSTON
LONDON
LOS ANGELES
MOSCOW
NEW YORK
PHILADELPHIA
WASHINGTON. D.C.
A REGISTERED LIMITED LIABILITY PARTNERSHIP
INCLUDING PROFESSIONAL CORPORATIONS
1500 NATIONSBANK PLAZA
300 CONVENT STREET
SAN ANTONIO, TEXAS 78205
(210) 270-0800
FAX (210) 224-2035
RECE~viD--ii
S::P 24: 1998
September 22, 1998
CITY SEeR::TARY'S
Oh'::iGE
::..=."".:.:..:...-==-.:~:--- .
Ms. Martha A. Gillett
City Secretary, City of La Porte
604 West Fairmont Parkway
La Porte, Texas 77571
Re: City of La Porte, Texas General Obligation Refunding Bonds, Series 1998
City of La Porte, Texas Waterworks and Sewer System Revenue Refunding Bonds,
Series 1998
Dear Martha:
Enclosed for the City's records are complete copies of the Bond Ordinances and Resolutions. It
was a pleasure working with you to bring the transactions to a successful close, and we sincerely
appreciate the opportunity to be of service to the City.
Very truly yours,
~
DORIS M. ALDERMAN
Assistant to M. Paul Martin
DMNsj
Enclosures
U7/ZZ/H8 ftBD 10:23 PAX 210 224 2031
AkiD GmIP - SA (PZl
IG 002
e
e
OR~GINAL
C!ll'11PICA'JB POllllESOWl1DN
'We, the 1DIdeIIigacdMayclr aad CIty &wcuy ofdlll CI1y of1.& Pade. ,.... (die -CIty'"). hcnby ~
as faIIcMt:
1. 'DIe CIty CaaaaU at the City (the "Caaacil" COIlvaud ill ..pier __ CIpIIIItD .... pab1iI:. on _
Play 18 --" 1_ 81 the mccdaa})leee daipdlld'" die Dl6:e (dID "MIetfq").1IIId 111I ron WIll caUcd
of'llletll~ 'lDwft NCBIIIIIlL. MaIau.M'ayar, _Ibe tbllcnriDsCity Co'"If!n_,,-"Guy SIIIIIerIsDd. CJwck
Jlta&efhn, HawarcI Ebow. DeadI Gay, Oadio YOIIIIIo 1cny ClMb. Bob McLIa&ftI~. ad Akaa PcIIW. AD
DIaIlbcrs of tills Caam:i1 .... pntIIId. m:IDC I'Ir _ lYIcLalJOh 1 in. CCbu~.
qaanDIL ~~ad1Irbusllless, the fbll0wia8wu b~lldle McctiD&:awritta....1nI'I- cmdtJed
llBSOLtmOM AVTBOBlZING PUBLICAnoN OF NOTJCB OP IN'IEN1'ION 1'0 I9SUB
'REVBNUB BONDS .
(duI-Kaohdkm" 'W'lldaly fIdrodDcedtcwiM CODIidendaaaf1lut CGaacU ad I'CIIdIll M. It,,.. duly IIlImld
11III ~tballba ltaahdiaa be fIaalIyplllSed ami Idupced; _lIfIr:rduc ~ mahlllCldcm. ClIDYfDI9Iida
IE die 8dopdaa at die ,,-~ JnVU1ecl1Dll cmied by 1110 foDolIriDs wfa:
'YES: 8 NOES: O. ABS'I'ENTIONS: 0
2. A 1rDo. fhD" and COft'eCl& CIOpy at1llD ltaDJutioa adorDd lit. Meetiq is attadlod to BDd follows 1IIiI
Certificate; tile pHl'lh",- his Ileal cJulf ~Ia dul Caaadl"sDIiDaIR otlb ~1he abGw md tbrePD8
paat8nlPb is a 1rae, fiID. and CMI'CCt c:xccrpt fiDm tho CGaGcfI'slllllmres at 1Ila MIaIiai ,*~I to tba adapdoa
of 1he Resolutloa; '1he pmoDI named ia tb8 a!Iava IIIId 1bn:piD; paqraph llI'O cIa1y c:hosa. qaallfied, IIld "'S
ot!icem aad ~ oftbc Council as iDdicIIed 1haeiD; ea&:h of die afIicerI mdmemben ofm. Coaacil WIS dIJly
and sufticrieady IlOt.iflc:d ollicia11y ancl pmcmaUy, in advaIII:e. of the time. place, aIId pIIIpG9D at dle ~& IIld
1bat die ReIoladon wauld b. hdraduced ;md considered for adoptfaa . die McetiD& arid each Of sacb af6caa IIIIIi
members CODSIIdId, ill advtaIctt lit tho hoIdiq at1hD MectiDs 1br _ parposr. 3IId. die Ma:Iiac wu opeo to ..
pIh~ and pabUo DOdco ofJhe1lme, p_ and pIIJJCIIC otlllc Mcctiq wu siva. an. zequilM by ClIapa "I,
TCXIIS GavcmmaIt Code.
3. Martba GilIeIt is tile duly Ippoildl:d and lICIh1g CIIy secrecary oiU. Cly.
SIGNBDANDSEALEDthiJ_~dr00 OJ::: '1" Iii I~
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City
~ .~f y.. Porte, Texas
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oC La Porte, Toaa
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OR~GINAL
RESOLUTION AUTHORIZING PUBLICATION OF NOTICE OF INTENTION
TO ISSUE REVENUE BONDS
WHEREAS, the City Council (the "City Council") of the City of La Porte, Texas (the
"City"), finds that the construction of improvements to the City's waterworks and sewer system and
the payment of contractual obligations for professional services in connection therewith (including,
but not Iirnited to, financial advisory, legal, and engineering) would be beneficial to the inhabitants
of the City and such property is needed to perform essential governmental functions, and the City
Council has determined that revenue bonds (the "Bonds") should be issued pursuant to the
applicable laws of the State of Texas, including Articles 1111 through 1118, Vernon's Texas Civil
Statutes, for such purposes;
WHEREAS, prior to the issuance of the Bonds, the City Council is required to publish
notice of its intention to issue the Bonds in a newspaper of general circulation in the City, the notice
stating (i) the time and place the City Council tentatively proposes to pass the ordinance authorizing
the issuance of the Bonds, (ii) the maxirnum amount of Bonds proposed to be issued, (iii) the
purposes for which the Bonds are to be issued, and (iv) the manner in which the City Council
proposes to pay the Bonds;
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
LA PORTE, TEXAS, THAT:
SECTION 1. Attached hereto and marked "Exhibit A" is a form of notice, the form and
substance of which are hereby adopted and approved.
SECTION 2. The Mayor or the City Secretary shall cause the notice to be published, in
substantially the form attached hereto, in a newspaper, as defined in Section 2051.044, Texas
Government Code, of general circulation in the City for two consecutive weeks, the date of first
publication to be at least 14 days prior to the date tentatively set for the ordinance authorizing the
issuance of the Bonds.
SECTION 3. The Mayor and the City Secretary are hereby authorized and directed to
execute the Certificate to which this Resolution is attached on behalf of the City Council and to do
any of all things proper and necessary to carry out the intent thereof.
. . .
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ORIGINAL
EXHIBIT A
NOTICE OF INTENTION TO ISSUE REVENUE BONDS
NOTICE is hereby given that it is the intention of the City Council (the "City Council") of
the City of La Porte, Texas (the "City") to adopt an Ordinance providing for the issuance of interest-
bearing revenue bonds of the City presently contemplated to be designated and known as the "CITY
OF LA PORTE, TEXAS WATERWORKS AND SEWER SYSTEM REVENUE BONDS, SERIES
1998" (the "Bonds") for the purpose of construction of improvements to the City's waterworks and
sewer system and the payment of contractual obligations for professional services in connection
therewith (including, but not limited to, financial advisory, legal, and engineering). The City
Council tentatively proposes to authorize the issuance of the Bonds at its regular meeting place in
the City Hall, La Porte, Texas, at a Regular Meeting of the Council to be commenced at 6:00 p.m.,
on the 22nd day of June, 1998 in an amount expected not to exceed $1,250,000. The City Council
proposes to provide for payment of the Bonds from a pledge of the net revenues of the City's
waterworks and sewer system.
/s/ Norman L. Malone
Mayor, City of La Porte, Texas
(SEAL)